tv The Kudlow Report CNBC November 6, 2013 7:00pm-8:01pm EST
remember, twitter opens up big. 40, 50, i would be a seller not a buyer. that's too much risk apropoe of what i talked about at the beginning of the show. it might open up and go up more and that may make you jump and i'm the most eagerly awaited ipo of the year is here. we just learned twitter shares have been priced at $26. they finally go on sale on the new york stock exchange tomorrow. the ipo tells us a lot about the markets overall. i believe a genuine bull market rally has been taking place for years. it's not a bubble. i don't think the bull cycle is over. by the way, stocks today closed at new all-time highs.
the dow up another 128 points. also this evening evening, president obama wrapping up yet another pep rally, cheerleading obama care and probably defending his falsehoods. this time he's in texas. we'll get the reaction from lieutenant governor from that state and perhaps an escape hatch from obama care you need to know about. chris christie gets the really big wins he was hoping for in new jersey. dick morris joining us live this evening. the "the kudlow report," we begin right now. good evening, i'm larry kudlow, this is "the kudlow report." we're live here at 7 p.m. eastern/4 p.m. pacific. the twitter ipo will start trading tomorrow. kayla joins us now.
good evening. what have you got. >> it came together before we came on air for "the kudlow report." twitter pricing at $26 per share. it's above the price range, above the increased range when they said they would raise between $23 to $25 for the shares selling to the public. $26 above even that heightened range. it means twitter will raise $1.82 billion in proceeds. goldman sachs has an additional 3 million they can sell. valuation for the company, a stunning $18.3 billion. that's when you add in all the employee stock-based compensation that could come to the market and potentially dilute investors in the coming months. tomorrow it will trade on the new york stock exchange. it's expected to open around 10:30.
between 10:30 and 11:00. a lot of market-making has to happen in the morning. they get allocations around 10:30, and then a lot of other people who want to jump in. this is the most highly anticipated ipo of the year. everyone was waiting to see where this traded. of course, we don't know what will happen when it opens tomorrow. what we do know, $26 a share. back to you. >> kayla, i want to get you here on the round table. i want to ask you, while you're over there, is it all for the big boys tomorrow, or will retail get a whack at this? >> i don't think retail will get a whack at this. i don't think a whole lot of institutions are getting a whack at this. i'm told the pot of investors that actually get in this deal are a handful, maybe a dozen big institutional investors. your blue chip money managers like blackrock, fidelity, vanguard. a lot of hedge funds and people clamoring just like the retail investor to get in. >> kayla, stick around. we'll get you over here. let's welcome carol roth and
kenny polacari with o'neil securities. $26 a share. the original estimate, the original, original estimate was a range of $17 to $20. then they got to $23 to $25. today they're talking as high as $28 a share. how does this happen? how does this process work? you've done a lot of ipos? >> i'm a former investment banker. this is very much an art, not a science. once they figure out what the demand is, the investment bankers want to have a situation where you get 15% to 20% of a pop. enough to reward the people who are coming into the ipo, but not so much that you're leaving money on the table as a company. you have to remember, twitter is raising just primary shares here. that's money for the company. so, any big pop is money they are leaving on the table. they don't want to have that happen. >> does this meet the criteria, in your judgment? as an investment banker, doing a lot of ipos, would you be happy with this. >> be happy with --
>> the price and capitalization, as kayla was talking about. >> i think the proof is going to be in the pudding tomorrow when you see what happens to the stock. the fact they started with the range they were able to raise it and they were able to price it above the range, means there was unprecedented demand. lots of demand for this ipo. we'll see how well they did tomorrow. >> the game is underpromise and overdeliver. blackrock has been an investor since january. t.rowe price, a lot of big investors from the early days. you have to imagine goldman sachs has been knocking on their door saying, what do you think the valuation is, what would you buy? they basically engineered this to make it look like the demand was greater than they thought. they were underpromising from the beginning. they knew it was going to be $26. >> do you agree with that? >> i think this afternoon they were talking about $27 to $28. i think they ran into resistance. to carol's point, they want to price is right where there's
enough of a pop so everyone's rewarded and no one is embarrassed. the last thing they want to see is a facebook debacle. they've been very keen to stay away from that. >> the last second thing they want to see is the stock go up to $80. that's a misprice on the other side. it's a delicate balance. >> the people look tomorrow, they open $50, or $55 and scratch your head saying, did you have your finger on the pulse in terms of demand? did we price it right or leave too much on the table? >> it's not the early investors getting rich off this. it's money the company could use for international expansion, for hiring people -- >> how many people -- an interesting question to me, the institutional game. i used to be in it. let's say goldman is knocking on the door, as you put it, to top institutional investors. how many people would you guess n round numbers, 15, 20? >> i would say around there.
i think you'll see a dozen with the majority of the offering we'll see tomorrow. >> pretty insiders' exclusive club. >> right. >> does that trouble you? >> i think -- >> people who get -- >> i would have expected they would have spread it out a little bit. >> they have to to create the demand. they have to give people a little bit to -- >> the reason i have, i have no great knowledge of this. kayla has much more knowledge. you all have much more knowledge. the reason i ask is i think -- it doesn't who do what you are worried about and shoot off the map and declared a bubble and everybody runs out. in other words, i think this is kind of a -- this is not really a free market capitalism. go ahead. can you take a whack at me. that's the way i see it.
>> people are anxious to buy it. the thing gets pushed up $40 to $45. people will put pressure on the price. >> that's what i'm getting at. >> that very well may be. >> i worked on wall street. i was involved in ipos. i never redid them. i was never a book runner. i never worked at the as i understand cat desk. >> this is not george sorros ending up with a giant slew of the shares where you need millions of dollars to get into his fund. we've been reporting on the funds that had exposure to twitter. you can buy into the t. row price fund that has twitter. i would argue that's the safer thing to do if you don't know how twitter will trade. i think the opposite of you, larry, they are actually giving these to institutions that are big enough to service your 401(k), to let the retail investor have a derivative vehicle to get in. >> there's also a relationship with investment banks. if you have institutional
investors who are in there who all of a sudden sell to put the downward pressure on it, the investment bank will not look favorably upon on that and they can come in on a future ipo. >> i think what with the memory of facebook still very fresh, the as i understand cat desks tomorrow are going to be highly, highly, hyperly active. that's what i think. ken, i just want to ask you, simple question, would you buy this? >> i would not buy tomorrow morning only because, typically what i think is going to happen, retail would i buy it? >> yeah. >> no. i would wait and see. let it open, let kind of the insanity trade and when it settles down. >> you're my pulse of america on this. >> i would also like to be pulse on america. >> would you buy it? >> no, i wouldn't. i would buy the mutual funds. can you look in their annual prospectus, pull them up. that's the safer way to go. >> some time we'll talk about mutual funds. those are not my favorite alternatives either.
overall market, up or down? >> i think the market is going higher. >> carol? >> higher, higher. >> higher, higher? >> me, too. that makes me so worried. oh, my gosh. kay lashgs you're the best of the best. thank you for helping us out this evening. ken and carol, you're all terrific. make sure to stay with cnbc tomorrow morning for complete minute-by-minute coverage of twitter as it finally starts trading on the nyse. that includes a first on cnbc interview with twitter ceo dick costolo in the 9:00 hour. now, the president and all team obama continue to double down on the broken promises of obama care, including lying about the original lie. so much more of that today. health care secretary kathleen sebelius kept defending the health care bill on chill and president obama just wrapped up a cheerleading rally in texas. later, we have an all-star
political expert panel learning the key lessons from chris christie's big win, ken cuccinelli's narrow loss and how big obama care will play in the 2014 races. hint-hint, a big role. stay with us for that. meanwhile, free market capitalism, the best path to prosperity. i'm kudlow and we will be right back.
welcome back welcome back live to "the kudlow report." let's get you updated on the big breaking news of the day on obama care. first up, the technology chief responsible for the catastrophic failure of healthcare.gov website is leaving to take a job in the private sector. really? who in hell would hire him? anyway, health secretary katr a kathleen sebelius got another grilling on capitol hill, this time from the senate finance committee. kansas senator pat roberts called for the former kansas senator to resign. >> your main goal should have been to protect them, but in your zeal to implement this wall, not warnings, not advice,
not counsel would deter you from implementing the exchanges. you have said america should hold you accountable, which is why today, madame secretary, i repeat my request for you to resign. >> all right. one guy from kansas ripping into another lady from kansas. very interesting. and we got important possible trend coming up. state health commissioners are urging insurance companies to extend existing plans that are being killed by obama care. a lot of this is state insurance commissioners, too. but here's the rub -- the state health care exchange administrators in many cases are saying no. and other state insurance commissioners are making similar moves. you've got a revolt here of the bureaucrats. so far, very little evidence 6 insurance plan extensions for the simple reason, i think, that president obama and his whole team don't want them. they want to impose their mandates immediately. so, here now let's go to grace reed turner, president reed
institute. wall street story, some want the insurance companies to extend the renewal period, maybe to the end of 2014 if the contracts permitted. but a lot of people running the actual health insurance exchanges don't want that. they want the insurance companies to get out. they'll take the pink slips. why is that? why are they being so difficult? >> you know, larry, this law already has sunk very deep roots into our health sector. when you say you want to fix one thing, like let people keep the policies they have now if they like them, there are ripple effects and repercussions throughout the whole system. in california, we see this one wrinkle in the law where the insurance agencies are able to allow people to keep their policies through the end of march. other people are going to have rolling allowances. but we're already seeing millions of people losing their
health insurance. and insurance states are looking for ways to figure this out. the house is yet -- next week are going to be considering legislation to let everybody grandfather your plan, if you want to. this is not simple. it's a very difficult thing because these policies have been priced based upon one set of rules and they're going to be operating under a different set of rules next year. >> but it's interesting to me, the players here. the guys and gals running the actual, changes themselves seem to be the ones who do not want extensions, at least they don't want long-term extensions. they want to get going, rock 'n' roll, they don't care about the pink slips, they don't seem to care about people losing their insurance and getting the cancellations. now, i just find that very curious. no one's coming down heavy. the insurance commissioner can't stop them. the only really the white house could exercise their authority, grace-marie, and they don't want to do that. >> they want people in the exchanges, larry.
>> yeah, yeah. >> they want to do away with the individual market. they want people in these exchanges, especially the healthy people, so they can pay more than their -- than they are expected to consume in health costs, so that it can level things out. so, of course, the exchange directors want to dump everybody into the exchange. they don't want people to be able to escape. >> and millions of people, right, millions. and there's million more pink slips coming. let me ask you quickly, a couple things. floor of the house and senate, i think you mentioned that, let me seefy get this right. we got a new bill, senator mary landrieu, senator joe manchion, any 2013 plan could be sold in future years, i think that's a loser. but more to the point, senator ron johnson of wisconsin and freddie upton of the energy and commerce committee, if you like your plan, you can hang onto it.
now, obama, as far as i know, is opposing any and all changes. do i have that right? >> he is opposing changes unless he is dragged, kicking and screaming to make these changes. he got an earful when 14 democratic senators up for re-election next year, who voted for this law, gave him an earful and said, you know, you've got to fix this because it is going to hurt us at the polls if you don't get this done. >> this is the jeanne shaheen group you're referring to. >> yes. >> mostly red state senators, red state democrats, but not all of them. jay carney today, correct me if i'm wrong, i tried to read what he said. he had no sympathy for that. he said, all these things are substandard. he's giving you the rotten apple. it's all substandard, so to hell with the people who are going to get completely screwed with higher deductibles and lose
their doctors. >> it's crazy. when the president says that, you know, really i didn't say if you keep your plan, i said you can keep your plan, period. i said, if you like your plan, it's the same plan you had before 2014 -- before 2010 when this law passed, then you can keep your plan. then he's blaming the reg writers who, by the way, work for him, for changing the law. here's the statement of administration policy that says the president would veto a law -- a measure supported by senator enzi of wyoming in 2010 after the grandfathering of regs were written saying that, you know, he would veto the law. so, he can no longer get off the hook and say, well, it was in the law, but not in the regs. >> last night with ron foreinie of the national journal, his great article, i don't like to
call presidents liars, but president obama defending false false hoods. thank you. president is in texas. he just wrapped up another pep rally touting his health rally reform. texas, the largest state that refused a state-run health care exchange. also refused a medicaid expansion. here now to talk about the president's speech, texas lieutenant governor david duhurst. welcome to the show. i know this is a complicated question -- and we know you're on the phone. we appreciate your time. why did texas elect not to have a state-run exchange either? >> well, larry, i decided, we decided that we were not going to expand under obama care the medicaid program. and we weren't going to allow texas to run the state exchange because of all of the -- of all the problems you were just talk
with your guest about. medicaid is broken. we have a broken system under medicaid. we've got some 5 million people covered under medicaid right now. why would we add 2 million more people to the -- we've been trying for four years to get a block grand under medicaid because one size doesn't fit all from the obama administration, and they've been snubbing us. give us your health outcome, goals, knock off all of the prescriptive micromanaging and in texas, larry, we could almost overnight add hundreds and hundreds of thousands of people to provide them more access to care. >> that's where i wanted to go. you have some of the republican states, john kacich, chris christie is in, they're saying they have state-run exchanges,
if i'm not mistaken, but they're saying in you can't qualify for obama care, you don't qualify for subsidy, they put you in medicaid. the obama administration says, we'll foot the bill. we'll front run you for that money for the next, i don't know, four, five years. i take it you didn't want to get involved with that. so i ask you, what do you do with the poor people that need to go on medicaid? >> first of all, i don't think you in your heart of hearts, and i certainly don't, believe that money is going to be there forever. sooner or later our congress, our house, is not going to fund all the money that's required under obama care. now, to answer your question, that's why in texas over the last eight or nine years i've been working on free market alternatives to obama care. so we have passed huge important bills for texas in which texas is providing a safe harbor under
anti-trust law to permit doctors and hospitals to come together to have incentives for better -- for better health outcomes, following best practices, and keeping patients well. and we have -- we know the model from the cleveland clinic and from mayo, and it works. and so that model will permit us to save enough money to be able to -- to significantly cover more of the uninsured. >> that's important because i think -- i think people do have a heart. know you have a heart. i know governor perry has a heart. i've talked to him about that. you'll have a lot of poor people that need medicaid and somebody has to pay for that. unfortunately, that's another segment. lieutenant governor david dechlt dewhurst, thank you. former georgia governor george pataki will join us.
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george pataki, who wrote a great piece in the new york post today, an escape hatch from obama care. govern governor, as always, great to see you. what is this escape hatch. define it. >> good to see you, larry. and it's very simple. when they passed obama care, one thing they didn't cover was self-shurngs. now, it sounds simple and it rel 2i6 relatively is simple, and people don't realize, particularly employers, that they have the option of showing employees themselves of a system that provides coverage and protection. getting out from under obama care and saving anywhere from 10% to 12% of the costs they would have under a conventional plan. >> george, walk us through this. >> i will. >> i'm a company. how is it that i self-insure, how do i insure my employees without going into any of these exchanges? >> let me give you an example. you're a small business. you have 50 workers. if you provide health care insurance, you're under obama care and the taxes, the
regulations, all the mandates kick in. if you self-insure, you do not have any of that apply. self-insurance means this. you go to your employees and say, okay, you're going to be covered. this is going to be your program. and, by the way, you'll have a deductible, whether it's $1,000 or $2,000 or so much of a co-pay, but what the company does is it sets aside reserves to pay the health care costs of those employees up to a limit. and oftentimes that limit will be $10,000. if someone has a catastrophic injury or disease, the companies buy what is called reininsurance. above a certain threshold, an insurance company picks up the risk. this means the company can be confident, that its reserves are adequate, providing great coverage to its employees. 100 million employees get this type of coverage from their employers right now. most of them don't even know it. you're out from under obama care.
you save a lot of money. >> 60% of large corporations are self-insured. 80% of the medium size. i'm sorry, 80% of the unions. >> 80% of the unions. that's exactly right, larry. unions were big proponents of obama care, 80% of their workers aren't subject to obama care because they're under self-insurance programs run by the union. quluns have figured this out. large businesses, as you said, 60% have figured it out. i think it's only like 10% of small businesses self-insure. they can save money, they can get out from under obama care, they don't have to worry about hiring that 30th employee and all of a sudden the fines and the taxes and the regulations kick in. so long as the obama administration and states don't pass legislation or regulation to pay away from option for the private sector. >> so, what i gather is the obama care -- the obama people are calling it the
self-insurance loophole. >> right. >> and what i also gather, i think this is from your article, or someplace, liberal states like california and new york are trying to cut this off. >> that's right. they're trying to cut it off in a number of ways at the state level. california just passed a law. you know, the normal plan, a small business that provides self-insurance, will reinsure, provide coverage to protect themselves at 5,000 or 10,000. california just passed a law saying you can't provide re reininsurance until it hits 35,000. if you're a small business with four or five employees with significant illnesses, you may not be able to afford, it the risk is too great. there's no good reason to do it other than to prevent self-insurance from growing, particularly among small businesses. >> all right. so -- -- >> you know what happens, larry, if small businesses sign up the way large corporations and unions have done, obama care, which is descent greating anyway, follows completely ap t apart.
we'll not have 100 million, we'll have 150 or 200 million people not subject to obama care. >> this is my last question. i'm a small business. i want to self-insurance. how do i do this? in the last half minute or so. >> you set up a plan -- you go to an insurance company. you don't buy insurance from them. you have them administer the programs. you have them -- their network available to you. and you buy reininsurance. take a number. $10,000. i will provide health care benefits to my employees up to $10,000. beyond that, you have reininsurance from a company. you set aside the funds. you don't have to pay anything except for that reinsurance because there's a high threshold before it kicks in, and you save a great deal of money and your employees have great coverage. >> it's a free market. >> that's exactly. hhs is trying to close it through regulations and undo it at the state. >> naturally.
that's what we love about them. >> we're going to fight back. >> many thanks. george pataki, we appreciate it. the republican party needs to take away important lessons from chris christie's historic re-election win in new jersey and the narrow loss in the governor's race in virginia. if the gop learns those lessons, they can learn in 2014 and they can also win in 2016. we have assembled a top-notch all-star political panel to map out exactly what we can learn from the big victory yesterday. larry sabatow, dick morrow, karen finney all about to join us. meanwhile, governor christie himself is ready to help nations learn from his triumph. check this out. >> the biggest thing i've learned over the last four years about leadership is that leadership is much less about talking than it is about listening. about bringing people around the table, listening to each other, showing them respect. doing what needed to be done. to be able to bring people
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so, so, what lessons did the new jersey gubernatorial race teach the gop and the democrats? here to offer their expert views, karen finney, msnbc host and former dnc communications director. larry sabitow, author of new york times best seller "the kennedy half century," and dick morris, former clinton adviser and radio talk show host. larry, i want to begin with you. i want to go to new jersey because i think the jersey race was completely different from the virginia race. i think the lessons learned in new jersey are completely different. we'll toss this to you and get everybody to comment on it. what did chris christie prove? he proved, for example, that a republican can win in a blue state. that's easy. but he also proved, i think, voters want problem solvers, right? voters want conservatives but
they want deals made, like ronald reagan used to make deals. and republicans can reach out. you know what, he got 51% of the hispanic vote, 57% of the women, 21% of the blacks. that's incredible. problem-solving, deal-making and reaching out to voters, the gop heretofore have missed. >> sure. what did the government shutdown prove? we have a lot of politicians who can't work together, who can't compromise. christie managed to create the image in his first term that he's somebody who will do that, who will work with people whatever their political strifes to get things done. that's exactly the profile of a presidential candidate who can win if somehow the base can be convinced of it. that's the problem. >> it is a problem. karen fin y i worked for a guy named ronald reagan, a conservative. i don't think anybody doubts that. but he was also a guy who solved problems and made deals, karen. he made deals.
>> sure. >> and reagan would say -- and he made deals i wished he hadn't, but he made them. he said, if i got half a loaf now, i'll come back and get half a loaf later. he made deals on spending, taxing, social security, so on. to me, that's the kind of conservative chris christie is. christie is not running away from the conservative label, karen. will the republican party -- i know you're a democrat. will the republican party learn from this? >> you know, larry, here's what i think is the most important lesson of that, actually, is will they learn but will they learn the moderates in the party should learn it's okay to stand up to the tea party extremists? because for too long and what we've seen is how we got to the shutdown. that tail is wagging the dog. you talk to moderates in washington and they just -- they're terrified of being primaried. they don't want to upset the apple cart with the tea party base. so, the point is, i think what chris christie may have shown, you can do it and win. by the way, the special election in alabama also showed that. >> dick morris, christie, an
interesting interview he had. he says, i'm a conservative. people are calling me a moderate. east he's tax-cutter, hell, he's pro-life. is thiscy made-up democratic thing about moderates in the tea party. >> i think it's overexaggerated by the democrats. i think what's interesting about christie, while he endorsed same-sex marriage, while he didn't challenge -- >> that's not an endorsement, come on. >> he did basically sell the idea that he could work with democrats rather than that he was a moderate, which is very important. >> and i've heard him make speeches. i heard him make a great speech at the reagan library over a year ago. this is what triggered everyone wanting him to run for president at that point. he said is, can you make deals and you can solve problems without losing your conservative principles. again, i'm not comparing christie to reagan. i'm just saying reagan had a similar line. >> that's not underestimate how
much the tea party learned during the government shutdown. they had their way, they programmed congress and they ran into a wall. they're not stupid people. they will increasingly understand the need to make deals and the need to reach out to moderates. >> larry, is this going to be a new era of deal-making? christie challenged the whole republican party last night, right? he said, washington, if you listen, can you see what we're doing here in new jersey, see what we're doing here in trenton. do you think his re-election and what he said last night is going to change the tone and attitude and modus oprendi of the gop in washington? >> in a word, no. i do think christie caught the attention of the republican party and, indeed, the whole country. those numbers were stunning from thinks re-election campaign. frankly, you just don't see them much anymore for a republican candidate. so, people paid attention. just because they paid attention, frankly, it was for a lot of republicans and tea party
candidates and officeholders, it was like going through a zoo and watching an animal in a cage. they're fascinated by the animal and what the animal is doing, but they're not going to become an animal. >> do you agree with that, dick morris? >> no, i don't. >> i didn't think you would. >> i think the main thing that will happen in washington is the republicans will get the hell out of the way. i think they understood that when they got out of the way and let obama care fall apart on its own, they gained. when they're in the way, fighting for their point of view, they lost. >> somebody once told me, if your opponent wants to hang himself, give him all the rope he needs. >> exactly. obama care is a rope factory. >> this is a rope factory, a public hanging and gets worse and worse. we'll talk about that. karen, you got off the hook in the first segment, but we're going to come back to mcauliffe -- >> i'm more than happy to speak to all of it. >> we'll talk to it. we'll go to virginia in the second party. larry sabatow, karen finney, dick morris. hang out. much more political lessons to learn.
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hot hot story. twitter priced at $26 a share. it's going to start trading tomorrow morning. our own mary thompson joins us now with the details. good evening, mary. >> good evening, larry. of course, a long-awaited pricing of the ipo, as larry said, pricing $26 a share, above the stated range of $23 to $25 a share. as $26 twitter will raise $1.82 billion, selling 70 million shares and additional 273 million shares will -- or dollars will be raised if it sells overallotment of 10.5 million shares set aside. tomorrow they value twitter at $18 million fully diluted. expect it to start trading roughly around 10:30. all the buzz about twitter's new ipo, we don't want to miss this. new dow record. powered by gains in the microsoft. blue chip index climbed 128
points to a new all-time high of 15,746 and change. larry, the dow, 16,000, now only 253 points away. striking distance. >> for what it's worth, i still think it's real. because the economy's growing and profits are rising. it's not all a fed bubble. >> i would like to see revenues rise a little bit more than profits because so much of that is coming on the heels of cost-cutting. >> i'm going to deliver your revenues. give me a little -- >> you are? hoing? >> personally -- >> when does the job hiring start? >> that's the key question. >> that is the key question. because we really need to see that. >> it's not going to be the next jobs report. don't think so. >> i don't think so. i think it might be several jobs report down the road. the good news is we go into this, corporate balance sheets are very, very good. we've been saying this for a long time. >> the economy, it ain't bad but it it ain't bad either. i like profits. i like mary thompson. thanks for helping us. folks, remember to stay with
cnbc all day tomorrow for minute-by-minute coverage of twitter when it finally starts trading on the nyse. it starts with "squawk box" at 6 a.m. with their exclusive interview with twitter ceo dick costolo. be there. now back to kudlow, we'll talk about if obama care is a magic bullet for the gop in 2014 and beyond. it almost erased a huge deficit for ken cuccinelli in virginia last evening. stay with us. we'll talk about more lessons learned from last night's election. the basics, you know. i got this. [thinking] is it that time? the son picks up the check? [thinking] i'm still working. he's retired. i hope he's saving. i hope he saved enough. who matters most to you says the most about you. at massmutual we're owned by our policyowners, and they matter most to us. whether you're just starting your 401(k)
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welcome back to "the kudlow report." all right, lessons learned in yesterday's elections and lessons applied in 2014. is it going to make a big difference? our political experts back, karen finney, larry sabatow and dick morris. larry, begin with you again. i want to give karen equal time, but i want to note this -- >> no you don't. >> -- when the government shutdown was in full flower, it virtually destroyed cuccinelli's campaign. just destroyed it. then all of a sudden obama care's launch comes around. it's a complete catastrophe. people forget about the shutdown and cuccinelli darn near won, coming back from the dead. now, i think there's an important lesson for republicans there. do you agree and do you think
they'll learn that lesson? >> well, even the democrats here say it was cuccinelli's change to focus on obama care once, as you say, the government shutdown moved off the headlines and that political disaster for cuccinelli ended. it was obama care that did enable him to get his mojo back in the campaign. so, i think that's widely admitted. interestingly, the mcauliffe folks never had mcauliffe up by more than a few points. their internal polling was quite different than some of these public polls, you know, with mcauliffe leading by 12 or even 15. but obama care played a roll,e,o question about it. and mcauliffe felt obligated to bring obamas in on the sunday before the tuesday election. i don't think that was the best timi timing. >> doesn't look like it helped much. karen fin y i know you love this
conversation. karen, here's my take. i'm a simple guy. know a little bit about politics. if the republicans figure out that shutdowns are bad, and if they figure out also that obama care is a national catastrophe in health terms and political terms, then i would say to you, and the democrats, you got a big problem in 2014, karen. >> well, i would say a couple of things. i would say that if you're going to continue to attack obama care, you've also got to be putting forward a plan to those people who are now in the system, what are you going to do for them? don't forget, there are people who currently have been in the system for a couple of years now. we have kids up to 26 and what have you. so, part of the problem i think the republicans have had when they talk about repeal, repeal, repeal, they don't have -- they're not putting forward any ideas. in fact, when you look at the polls with obama care, most people think it doesn't go far enough. in terms of the lessons of virginia, it's a good spin you've got there, but i just don't want us to forget a year ago people said, cucc, no way he
could lose, he was a shoo-in. don't forget, he was losing among women voters by double digits for a very long time, female voters -- >> i understand, but -- >> hold female voters made a huge difference in this election. i think that's something for republicans to pay attention to. >> christie did a better job. dick morris, i want to ask you about the same thing. has the republican party learned its lesson on shutdowns? point number one. point number two, will they focus a lot of effort on obama care and its catastrophe? >> yes, and they'll get out of the way and let it fall apart. >> is that the golden road to winning majority, let's say, in the senate in 2014? >> it was in 2010 and it will be in 2014. we lost in virginia. republicans lost because virginia had a 46% approval of
obama in the exit polls. the national poll average is 42%. gallup has it at 39%. virginia is more liberal than the rest of the country on that, at least on obama. secondly, the off-year turnout model applied. 3.8 million votes in the presidential. 2.2 million in this. off-year vote keeps obama voters home. happened in '10, happened in '13, going to happen in '14 -- >> but actually, this time -- >> but -- >> but that's not quite what happened yesterday. >> excuse me, karen, i didn't interrupt you. let me finish. >> sure, dick. >> it is an obama care polarization. 88% of those who support obama care voted for mcauliffe. 80% of those who oppose it vote for cuccinelli. any multivary ated analysis would say this hinged on obama care. >> yes, it did. >> now you can talk on karen. >> larry, i want to take a little different route.
republican party, it seems to me, cannot win national elections if they concede and give up on large swaths of the population. meaning, blue states, okay? i mean, i was around, you were around, ronald reagan won in new york state. ronald reagan won in california. ronald reagan, hell, won in massachusetts. it seems to me, larry, chris christie is a republican who understands that you've got to parachute behind enemy lines and take back some of the blue states or the gop just ain't going to win another presidential election. your take. >> of course that's correct. i mean, they have to do something to win blue states. maybe they start with the purple ones. frankly, larry, like virginia, which is, after all, the closest to the national average presidentially now for both 2008 and 2012. hey, if you can't win virginia back, you're not going to win the white house back. so, the republicans really do have to follow the christie model, even if they don't agree
with all of christie's positions. they have to find people who talk blue. you know, there are other people out there, like scott walker, governor of wisconsin, he's won in a blue state and he talks blue. >> john kasich knows how to talk blue. there's a whole bunch of them. in this respect, i think christie is a path-breaker. karen finney, dick, you're great. that's it for this show. lots of twitter tomorrow on cnbc. i'm kudlow. thanks for watching. thine customers!ermany o [old english accent] safe driver, multi-car, paid in full -- a most fulsome bounty indeed, lord jamie. thou cometh and we thy saveth! what are you doing? we doth offer so many discounts, we have some to spare. oh, you have any of those homeowners discounts? here we go. thank you. he took my shield, my lady. these are troubling times in the kingdom. more discounts than we knoweth what to do with. now that's progressive.
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